§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]
§ 12.6 am
§ Mr. Andrew Hunter (Basingstoke)Let me first set the scene. I introduce on the one hand my constituent, Mr. Michael Birkett, and on the other hand that august body, the Law Society; and I invoke the lay observer as an impartial referee—more precisely, the 16th annual report of the lay observer 1990. Those are the main characters in the saga that I want to describe.
I am grateful to my right hon. and learned Friend the Attorney-General for being here to reply. I am fully aware —and I stress this—that he cannot comment on Michael Birkett's specific case and his long-running dispute with the Law Society. 1 neither ask nor expect him to do so. I draw a specific case to the attention of my right hon. and learned Friend and the House in a desire to promote a brief debate on the wider issues that emanate from it.
I raise the case for two further reasons. I hope that by so doing I will increase awareness outside the House of the particular injustice that my constituent suffered, and perhaps contribute to its resolution. I hope also that tonight's debate will play a part—albeit only a small part —in persuading the Law Society that it must put its own house in order. I contend that the society's failure to do so significantly contributes to the public's growing lack of confidence in the legal profession and in the process of justice. Those are undesirable trends, and they should be put right.
In 1974, Michael Birkett became involved in litigation. The solicitor acting for him was a certain Mr. Brian Fulwell of Fulwell and Partners, Bristol. Michael Birkett received from Mr. Fulwell a series of unwarranted demands for unwarranted sums of money. They were accompanied by threats not to represent Mr. Birkett at imminent, prearranged court proceedings. In indignation, my constituent complained to the Law Society. He was right to do so.
Even in 1974, the Law Society must have known—and most certainly should have known—that Fulwell and Partners was guilty of misconduct in its submission of interim bills. Eventually, the outcome of litigation entirely exonerated my constituent: each of his allegations was substantiated.
It is remarkable that the process of litigation should have lasted 12 years. During that time, and as a result of the drawn-out process of litigation, my constituent suffered—I use the legal phrase—loss, distress and humiliation. I strongly contend that none of it would have happened if the Law Society had properly investigated the allegations of misconduct, and properly adjudicated the consequences of its own shortcomings. I further contend that the Law Society should have mounted a proper and prompt investigation of the allegations.
Let me now turn to the subject of the Law Society, and refer specifically to the standards that it should set and should demand from solicitors. Addressing the Law Society's conference in October 1991, the president, Mr. Philip Ely, warned that the future of the solicitor's profession and its integrity were threatened, because the society protected the inefficient and dishonest solicitor—a noble and bold sentiment for him to express.
1090 I invite my right hon. and learned Friend the Attorney-General to consider a simple proposition. In the civil courts, it is the solicitor who provides the point of access for the citizen to the administration of justice and the process of law. It is, moreover, the quality of the service provided by the solicitor that largely determines that quality of justice that the citizen will subsequently receive. The solicitor has always been the most frequent advocate in the lower courts, and recently he has been given the right to a wider audience in higher courts. The solicitor is an officer of the court.
The integrity and competence of the court's officers are fundamental to the quality and reputation of justice. It is the statutory duty of the Law Society to set and maintain standards that are acceptable to the profession and the public. I have no doubt that a large majority of solicitors serve their clients and the courts with competence and integrity; however, the point that has rightly alarmed the Law Society is that a significant number of solicitors do not have acceptable standards.
Evidence is provided by the claims made on the compensation fund for losses resulting from the activities of dishonest and defaulting solicitors. They rose from £6–7 million in 1988 to £14.6 million in 1989, and to £18–3 million in 1990. The number of complaints to the Law Society about solicitors rose from 5,000 in 1977 to 9,000 in 1985, and to a record 18,000 in 1987. Since then, there have been more than 16,000 each year.
An inquiry in the late 1970s followed the highly publicised dispute between Mr. Leslie Parsons, a business man, and his solicitor, Mr. Glanville Davies, a senior member of the council of the Law Society. In due course, the inquiry reported:
We have found administrative failings, mistakes, wrong decisions, errors of judgement, failures in communication, high-handedness and insensitivity on a scale that must have done great harm to the Law Society. The whole episode is a disgrace to the Law Society.There could scarcely be a more damning verdict.In the past decade there have, of course, been successive improvements in the system for handling complaints against solicitors. In due course the Solicitors Complaints Bureau emerged, but it is not apparent that the Law Society has effected sufficient improvements in the overall standards of the profession. As I shall shortly argue, the society seeks to treat the symptoms but not the disease. Unless proper standards are enforced and while the society, either advertently or inadvertently, protects the dishonest and incompetent solicitor, there can only be further and increasing defaults among solicitors.
The remedy is not the one put forward by the president at the Law Society conference last October. Among other points, Mr. Philip Ely suggested that the profession should re-examine the practice of compensating for dishonesty, wherever and however caused. It is entirely unacceptable that the profession should ask for a reduction in the degree of protection afforded to those who use its services.
Next I turn to the lay observer's report. The 16th annual report of the lay observer, 1990, was, coincidentally, laid before the House a year ago today. It makes alarming reading. There are two themes that I wish to select. First, the report indicates that the professional standards of the Law Society itself remain unacceptably low. They appear not to have risen above the low tide mark that the society's own inquiry exposed in the Parsons-Davies case in the late 1970s. Secondly, it appears 1091 from the report that the society may already have embarked unofficially on the policy suggested by its president—namely, of reducing the amount of cover for the public through the statutory compensation fund. The case of my constituent, Michael Birkett, illustrates both points.
To expand, first, on the society's standards, paragraphs 63 to 75 comment on the Law Society's handling of my constituent's complaint. The society and the bureau took 16 years to complete their investigation. The lay observer rightly sees this as a matter of great concern and serious criticism. Paragraph 69 reads:
In my report of August 1990 I expressed great concern and seriously criticised the Law Society/Bureau for the fact that it took 16 years to deal with BI's"—the initials of my constituent—"complaints."The society, on the other hand, does not see the delay as a matter for concern or regret. It has produced a series of excuses to justify its delay in investigating a solicitor who was eventually imprisoned for defrauding 26 other clients in the meantime. The Law Society might not have taken any action, even to this day, were it not for the prior action of a third party who forced the solicitor's insolvency.
An analysis of the detail of the report finds the society and/or the bureau culpable of no fewer than 24 instances of error, omission, perversity, prejudice and dereliction of duty. Among these was the loss or destruction of files containing the first eight years' correspondence and records. The society made no attempt to obtain copies of the missing letters from my constituent. To this day it has made no efforts to obtain copies. It proceeded to determine the complaint without them.
In his more detailed report of August 1990 the lay observer lists more than a dozen serious allegations of misconduct, none of which, he concluded, the Law Society ever properly considered. Is the society simply guilty of gross incompetence and disdain for duty, or could it be that it is trying to avoid financial consequences which would otherwise fall on its compensation and indemnity provisions? The society knows full well that proper consideration of Michael Birkett's complaint would result in another rightful and substantial claim on its funds.
That leads to the second point of my concern about the lay observer's report. The Law Society's reducing financial responsibility for dishonest and incompetent solicitors is a matter of concern. I stress that that is not the perception and experience of my constituent; the lay observer makes the same point. In paragraph 143 he records his concern that the society has imposed its own restrictions on access to the fund so as to deny clients some of the protection which the statutory funds should be providing.
The lay observer shares my constituent's belief that the Law Society is already operating an unofficial policy designed to reduce liability to meet in full the proper claims made on it for compensation.
The threat to the future of the solicitors' profession will not be countered by the president's proposition to the Law Society's conference last October. He said, as reported in The Daily Telegraph of 18 October last year, that it is
time for the profession to examine afresh that it would pay for dishonesty wherever and however caused.I appreciate that my right hon. and learned Friend cannot comment on the individual case of Michael Birkett. 1092 I invite him, however, to consider its wider implications, and from the particular to consider the general. As the lay observer reports, the case of Michael Birkett illustrates that all is not well with the administration of justice and the process of law. The erosion of public confidence parallels the erosion of the standards and the example set by the Law Society. I suggest that the two are related. The Law Society must put its own house in order, or it must be put into order, so that others do not experience what Michael Birkett has experienced.
§ The Attorney-General (Sir Patrick Mayhew)I should like to congratulate my hon. Friend the Member for Basingstoke (Mr. Hunter) on having secured this Adjournment debate for the purpose of referring to this most disturbing case. My hon. Friend has spoken the more effectively for his refusal to spice his speech with adjectives, since he was dealing with an investigation of a solicitor's alleged misconduct that itself extended over 16 years. Since that was the case, his self-restraint was indeed deserving of reward. As I say, I think his speech was much the more effective by reason of it.
It is entirely right that he should have drawn attention, as he has done, in this context to the lay observer's 16th report. I agree entirely with what he has said about the great importance of the legal profession attracting, and deserving to attract, the confidence of the public. I will have something to say later about the privilege of self-regulation. My hon. Friend's speech was further tempered by realism in that he acknowledged—and I am grateful for it—that I cannot myself achieve redress for his constituent, Mr. Birkett.
The solicitors' profession is entirely independent and self-regulating. The professional practice, conduct and discipline of solicitors are regulated by statute, as are the rights to practise as a solicitor. Parliament therefore has an opportunity to discuss the statutory regulation of the Law Society whenever any changes are sought to the present arrangements.
The lay observer, to whom my hon. Friend has referred, was established by the Solicitors Act 1974 to examine allegations made by members of the public concerning the society's treatment of complaints about solicitors. Over the years that followed, it became apparent that the existence of that office by itself was not proving to be a sufficient spur to the profession to improve its procedures for dealing swiftly and effectively with alleged failures in professional competence. The Government's White Paper entitled, "Legal Services: A Framework for the Future", published in 1989, accordingly recommended that the lay observer should be replaced by a legal services ombudsman with increased powers.
One of the matters on which the Government expressed particular concern was the problem identified by the lay observer in his report on Mr. Birkett's case. In that case, he had criticised the policy of the professional purposes department, as it then was, of the Law Society and subsequently of the Solicitors Complaints Bureau, which was its successor, not to investigate complaints if there was litigation in prospect or in progress.
The Master of the Rolls indicated in 1987 that this policy could be unsatisfactory and produce unfair results.
1093 He said:
It is only if there is a risk that the investigation of misconduct will in some way muddy the waters of justice … that the Solicitors Complaints Bureau should, in my judgment, refrain from investigating a case for misconduct".The bureau has since changed its policy. I understand that the practice now is, wherever possible, to investigate complaints straight away where the matters complained of are the subject of court proceedings, whatever the cause of the litigation, including allegations of negligence by a solicitor. The bureau's case workers were notified of this policy change. In addition, a complainant who has been informed that his case will not be investigated while associated litigation is pending may seek to have that decision reviewed. I will be interested to see if the ombudsman comments on the operation of the revised policy in his annual report. I recognise that, unfortunately, this change in policy has come too late to benefit Mr. Birkett.The new statutory office of legal services ombudsman was subsequently created by the Courts and Legal Services Act 1990. The ombudsman is completely independent of Government and of the profession. It is a source of encouragement to all of us who share the interest of my hon. Friend the Member for Basingstoke that the first incumbent is a person for whose standing and experience the legal profession has such high regard.
The ombudsman has powers that go beyond those of the old lay observer. He is able to investigate not only the way in which complaints are handled by the relevant professional body but the original complaint. In addition, although the ombudsman would not normally examine a case until the profession's own complaints procedure had been exhausted, he has a discretion to investigate if it appears to him that the professional body's investigation process is being unreasonably delayed. When one considers that Mr. Birkett's original complaint was made in 1974 and the Law Society's final decision was given in 1990, one can see the value of this provision.
The ombudsman is able to refer a complaint back to the professional body with a recommendation that it look at it again. In addition, he has powers to recommend that either the practitioner or the professional body pay compensation to the client. This power is backed up by a publicity sanction under which, where a practitioner or a professional body refuses to comply with the ombudsman's recommendations, the ombudsman can either require them to make public their reasons for not doing so, or he can publicise their non-compliance and recover the costs for so doing from the individual practitioner or from the professional body. These increased powers—I remember debating them in the House nearly two years ago—represent a significant improvement in the way in which the ombudsman is able to investigate individual complaints, and to achieve redress for complainants. In addition, his remit has been extended to cover complaints against barristers and licensed conveyancers. In addition to 14 recommendations to the Solicitors Complaints Bureau that individual cases be reinvestigated, he has made 16 recommendations that compensation should be paid to complainants, for amounts ranging from £200 to £1,500. In one case, the complaints bureau has been required to pay compensation; in the other 15 cases, solicitors have been required to do so.
The ombudsman is uniquely placed to see where procedures may be operating unfairly and to the detriment of complainants. He is accordingly authorised to make 1094 general recommendations to the professional bodies about their complaints handling procedures, as well as to comment on procedures adopted in individual cases. The professional bodies are required by statute to have regard to any such recommendation. That is a significant improvement on what obtained before. I know that, since the White Paper on legal services, much has been done to improve the handling of complaints by the Solicitors Complaints Bureau and by the Law Society to improve and maintain the standard of care accorded to clients. I fear that Mr. Birkett's case vividly shows that there has been scope for that.
The Solicitors Complaints Bureau was set up in 1986 to replace the professional purposes department, which had previously handled complaints about the profession. This earlier arrangement had been criticised by many on the ground that it could not be shown to be sufficiently impartial. The complaints bureau was therefore set up to be independent of the Law Society—a major change—with a lay-dominated investigation committee to monitor its performance. The number of complaints received by the bureau is substantial. In 1990 there were nearly 18,000.
Over the past year, there have been significant changes in the way in which the bureau conducts its work. From 1 April last year, the bureau has been able to order a solicitor to compensate clients for work which is not of an adequate professional standard, up to a limit of £1,000, in addition to taking disciplinary action. In cases of negligence, where the complainant agrees, the bureau can also pass complaints of major negligence direct to the professional insurers, the solicitors indemnity fund. This will obviate the need for complainants in every case of negligence to take legal action. In some cases, particularly where the issue of negligence is disputed, this will still be unavoidable.
The bureau has shifted the emphasis of its work away from the investigation of disciplinary offences, which can be extremely time-consuming, towards conciliation. This informal approach aims to find a solution to the problem which is acceptable both to the client and to the solicitor, and the bureau now has a network of local conciliators who are used in simpler cases. In more complex cases, and where there remain outstanding issues of conduct or inadequate professional services, the bureau's staff will investigate the matter.
On the basis that prevention is better than cure, the Law Society has, from 1 May 1991, required all solicitors' firms to introduce new procedures for handling complaints in-house. In addition, solicitors are required to explain their procedures for handling cases at the outset of a case. The complaints bureau has also introduced a help line for clients rather than for solicitors, to assist complainants who are not certain whether they have a complaint or how to pursue it. I very much hope that these improvements in procedure will help to avoid the recurrence of cases such as Mr. Birkett's or of cases that even approach it.
In his report on Mr. Birkett's case, the lay observer said that it must be a matter of great concern and serious criticism that it took the professional purposes department —and the successor complaints bureau—16 years to reach a conclusion on Mr. Birkett's complaints. It may be enough for me to say tonight that I strongly endorse that opinion.
The Government have since established an entirely new framework, and the legal services ombudsman, with his new and much more effective powers, is now in place and 1095 at work. It is for the professions themselves to ensure that procedures are devised and implemented which fully justify their privilege of self-regulation. That is a valuable privilege. However, if it is to continue, its existence must be 1096 seen to secure the interests not primarily of the profession and its members but of the public whom it is the true purpose of every profession to serve.
Question put and agreed to.
Adjourned accordingly at twenty-six minutes to One o'clock.